Sustainable Companies are More Profitable than Ever

Good news for corporate social responsibility leaders: there’s a growing body of evidence that sustainability often goes hand in hand with profits. A new report from MIT Sloan Management Review and the Boston Consulting Group adds even more data to the pile: according to a survey of 2,600 executives and managers around the world, the number of companies that profited from sustainability initiatives climbed to 37%–up 23% from last year.

MIT’s paper, The Innovation Bottom Line, is the latest in a series of reports dating back to 2010 that examine sustainability challenges in organizations. Here’s what we learned:

The number of companies that profited from sustainability initiatives climbed to 37%–up 23% from last year.

Organizations need a business case for sustainability if they want their efforts to be successful. Among what the report calls Sustainability-Driven Innovators–companies that have changed their business models to incorporate sustainability and are making money from those changes–54% developed a business case. Almost 60% of companies that merge value-chain innovation with target segments–and tweak other parts of their business models–are Sustainability-Driven Innovators.

Impressively, 61% of companies that have changed their business models to incorporate sustainability as a vital piece of the management agenda say that they have also added profit from their efforts. And, unsurprisingly, companies that profit from sustainability efforts are 200% more likely to create business cases for sustainability.

The companies turning profits from sustainability generally have five practices in common: they’re prepared to change business models, they lead from the top and integrate efforts directly into their businesses, they measure and track sustainability performance, they understand how their customers view sustainability and what they would be willing to pay extra for, and they collaborate with people and groups outside their organization.

In sum, the report reiterates what many CSR professionals instinctively knew: Sustainability efforts have to be integrated into businesses at all levels, and accountability for goals is key.